By Dominic Chopping

DNB Bank ASA on Thursday posted a larger-than-expected rise in third-quarter net profit as earnings were boosted by higher income and flat costs.

Norway's largest lender made a profit attributable to shareholders of 6.66 billion kroner ($797.1 million) compared with NOK5.29 billion a year earlier. Net interest income rose 5% to NOK9.77 billion.

Analysts polled by FactSet had expected net profit of NOK5.9 billion and net interest income of NOK9.63 billion.

DNB said the repricing of its customer loans and deposits is expected to have a full annual effect on income of around NOK1.5 billion, with effect from mid-November.

The bank is targeting a return on equity above 12% for the period 2021 to 2023, but reiterated that due to Covid-19 and the subsequent macroeconomic developments, the target is unlikely to be achieved in 2021.

Between 2021 and 2023, the annual increase in lending volumes is still expected to be around 3%-4%, while net commissions and fees are still expected to rise by 4%-5% annually with a cost-to-income ratio below 40%.

DNB's common equity Tier 1 capital ratio--a measure of a bank's financial strength--rose to 19.2% from 18.9%.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

October 21, 2021 02:57 ET (06:57 GMT)

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